The defining characteristics of the Charlotte real estate market over the past two years have been soaring house prices and falling inventory. Experts predict 2022 will be different.
Why is this important: It has been said for months, but buyers are tired. And even subtle changes in the market will bring much needed relief.
Inventory: The Charlotte market has cooled, as inventories rise and home values drop slightly, according to the latest news from Canopy MLS.
Inventory is still historically low, down 37% from last year.
- Jeff King, a real estate agent specializing in historic neighborhoods near Uptown, says there are currently only 8-9 homes for sale in Plaza Midwood.
- Ten years ago, when stocks were already starting to drop, there were over 120 homes for sale in Plaza.
What they say : Home prices and interest rates are expected to rise in 2022. Spring, which is the busy real estate season, is expected to resume in 2022 with more new listings and peak demand.
- But many potential buyers will hold off on buying a home, local experts tell me. And when demand cools, prices will also drop.
- And while prices don’t drop too much, experts say Spring 2022 won’t be as hectic as Spring 2021 and Summer 2020.
Donny Kirby, Wyndham Capital’s vice president of sales said mortgage rates are expected to rise to 4% by the end of 2022. That’s almost a point higher than the average rate for 2021.
- Depending on the size of your loan, this could make your monthly payment $ 150 to $ 200 higher in 2022 than it would have been in 2021.
“Like the prices and interest rates go up, I think we’ll see more people deciding it’s not the best time to buy, ”said Jeff Clay, first-time homebuyers specialist.
David Hoffmann said, many savvy buyers have noticed that more homes have been on the market in recent months. And because stocks have remained more stable, there is less desperation.
- He predicts that buyers will be more willing to wait for the right home, and the days of bidding rather than asking on invisible sight are likely over, for now.
- “Home prices will rise again, but not for five years,” Hoffman said.
Yes, but: Charlotte is a hotspot for newcomers, which means that there will always be a strong demand to keep house prices from falling too low, Libby Gonyea said.
- “Charlotte is one of the most sought after places in the country and I expect it to stay busy,” she said.
Inventory is still tight, but experts say it could improve in 2022, as sellers who delayed in 2020-2021 decide to go to the market.
Between the lines: Covid-19 is still a wild card, King says. Many potential sellers are still uncomfortable with tours and open houses, which has affected inventory.
- King says it’s unclear exactly how many people are waiting to sell until the pandemic is over, but “when the pandemic ends we might see a bigger correction.”
The other side: While homes have sold for the highest price in the past year, the Charlotte market has not been easy for sellers to navigate either.
- “There are a lot of people who want to sell, but they are worried about where to go with so little inventory,” Gonyea explained.
There are a lot of inventory is tied up at the luxury level as well, Hoffman said. He noticed that potential luxury sellers have chosen to prioritize buying a vacation home over upgrading or downsizing their primary residence in Charlotte.
- These buyers can buy their next home without selling.
- And once they sell, the market moves more and stocks loosen.
So what does this really mean for buyers?
“For buyers I think it will still be a bit difficult to find a home, ”said Clay. “So start early if you can.”
The king recommends buyers start looking for homes a few months before they start bidding. This will give you an idea of how the market works, what is out there and what you do and don’t care about in a home, he says.
- If 2022 follows a traditional market pattern, prices will peak in May, so buyers are more likely to close a deal now and after Memorial Day.
Obtain pre-approval for a mortgage will also help buyers once they are ready to make offers.
- To qualify for a 30-year conventional loan, you need a credit score of at least 620+ and be prepared to put down 3.5 percent, says Kirby.
- Even if your score isn’t there yet, your loan officer can help steer you in the right direction, so when the time is right, you’ll be all set.
Sellers will probably still be in a good position, but experts suspect that we have already exceeded maximum house values.
” Last year we’ve seen a lot of sellers put their homes on the market without doing a ton of prep and almost at the price they wanted, ”Clay said.
- Gonyea said buyers will have high expectations, especially if they pay a premium. This means that sellers will have to do more to prepare their homes for the market than last year.
- And overvaluing your home could hurt your bottom line, Clay said.
Historically, early spring was the best time to sign up, King said. But if your style of home is in demand – say, a lovely three-bedroom bungalow – you can list it now and get a good price for it.
At the end of the line : Charlotte’s real estate market is expected to remain strong in 2022, but conditions are expected to improve for buyers compared to 2021 and 2020.